Key Morningstar Metrics for Volkswagen Group VOW
Analyst: Rella Suskin, CFA
- Morningstar Rating: ★★★★
- Fair Value Estimate: EUR 172.00
- Economic Moat: None
- Industry: Auto Manufacturers
- Forward Dividend Yield: 6.76%
- Discount to Fair Value: 46%
Volkswagen VOW, the German car maker, is facing strong headwinds, so little surprise its shares are down more than 14% over the past year. But does that mean the stock is looking cheap?
The company has been rocked by US President Donald Trump’s levies on the EU.
With only around 5% market share in North America, VW saw the US as a growth opportunity. But then came tariffs and now the carmaker has temporarily suspended the export of vehicles from Mexico into the US.
Morningstar’s Rella Suskin also sees VW’s “in-China-for-China” strategy as unattainable.
The company had sought to invest significantly in an independent head office, R&D, and technology in China, in the hopes it could build upon its once dominant market position in the region. But VW faces tough competition from burgeoning domestic electric vehicle brands, such as BYD.
These obstacles have shown up in the company’s results.
VW recently reported a pre-tax profit for Q1 2025 of EUR 3.109 billion, a 39.5% decline from the EUR 5.136 billion the carmaker saw in Q1 2024.
However, despite the clear challenges VW is facing, according to Morningstar metrics, the stock is undervalued, currently trading in four-star territory.
Its share price is trading around the 90 euro mark currently, below Morningstar’s fair value estimate of 172 euros.
